Drug development costs have increased beyond any normative index and we are mindful of that fact. We seek cost effective work models to help plan and and agree on reasonable costs.
Regulatory complexities have also increased with new programs, e.g. Expedited Programs, Commercial and Research INDs, and greater incentives for Pediactric and Tropical Diseases therapies.
There are simple three cost models we select to manage our relationship with our clients:
- Model 1: A Simple Fee for Service Model. Hours of work time are tracked and cummulated for everyone involved or required for project completion. This model is, of course, an open model for costs. This model works best when there are several key uncertainties or dependencies for project success. We will estimate costs, reply to your RFP, but we add a “Not to Exceed” limit. You are obligated for work completed only.
- Model 2: Project-based and Milestone-based Model. We supply with you with a scope of work outline including assumptions and we agree on final costings. This model applies best when there is a clear project goal such as IND filing and allowance. We invoice monthly or at the completion of milestone events. We create a Master Service Agreement and then add Work Orders as the project evolves. Each Work Order has a proposed cost for review and discussion and deliverables.
- Model 3: Monthly or Quarterly Retainer Model. Monthly fixed-rate, typically in fiscal quarters. This model applies best to projects that require lifecycle management or for example, US Agent or Authorized Agent services that typically continue from year to year or for projects with a long lifecycle–IND through MAD studies.
Under Model 2 we use maximum allowable costs or MAC. MAC-based proposals are “not to exceed cost limits” and this allows our clients to budget with confidence. We have found that many of the unknowns in a proposal cannot be identified at the start of a project. So we have decided to limit exposures until we know exactly where the project is headed and what resources are needed to achieve your goals. We amend our proposals as needed, but historically we have found that the amount of any adjustment is small.
We are happy to provide our fee sheet, but typically we do not do this until we have an introductory conversation and agree that our skill set is a good match for your needs.
We do not bill for:
- Travel time in the US unless it is > 2 hours.
- Overhead or our rent or internet connection.
- Internet tools that we use to assure safe transfer of documents.
We have found that a Master Service Agreement (MSA) with detailed and well-defined work orders, amending the MSA, suit most clients.
We are a relationship company and not a transaction company !